Alamo Group Inc (ALG) 2024 Q3 法說會逐字稿

Good day, and welcome to the Alamo Group Inc. third quarter 2024 conference call. (Operator Instructions). Please note, this event is being recorded.

美好的一天，歡迎參加 Alamo Group Inc. 2024 年第三季電話會議。 （操作員說明）。請注意，此事件正在被記錄。

I would now like to turn the conference over to Edward Rizzuti, Executive Vice President, Chief Legal Officer and Secretary. Please go ahead.

我現在將會議交給執行副總裁、首席法務官兼秘書愛德華·裡祖蒂 (Edward Rizzuti)。請繼續。

Thank you. By now, you should have all seen a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact us at (212) 827-3746, and we will send you a release and make sure you are on the company's distribution list. There will be a replay of the call, which will begin 1 hour after the call and run for 1 week. The replay can be accessed by dialing 1 (877) 344-7529 with the path of 610-161. Additionally, the call is being webcast on the company's website at www.alamo-group.com, and a replay will be available for 60 days.

謝謝。到現在為止，你們應該都已經看到了新聞稿的副本。但是，如果有人遺失了一份副本並希望收到一份，請致電 (212) 827-3746 與我們聯繫，我們將向您發送新聞稿並確保您在公司的分發清單中。通話將進行重播，重播將在通話後 1 小時開始，持續 1 週。可以透過撥打 1 (877) 344-7529（路徑為 610-161）來觀看重播。此外，該電話會議正在該公司網站 www.alamo-group.com 上進行網路直播，並將提供 60 天的重播。

On the line with me today are Jeff Leonard, President and Chief Executive Officer; and Agnes Kamps, Executive President and Chief Financial Officer. Management will make some opening remarks, and then we'll open up the line for your questions.

今天和我一起在線的是總裁兼首席執行官傑夫·倫納德 (Jeff Leonard)；和艾格尼絲坎普斯，執行總裁兼財務長。管理層將發表一些開場白，然後我們將開放您的提問熱線。

During the call today, management may reference certain non-GAAP numbers in their remarks. Reconciliations of these non-GAAP results to applicable GAAP numbers are included in the attachments to our earnings release.

在今天的電話會議中，管理階層可能會在演講中引用某些非公認會計準則資料。這些非 GAAP 結果與適用的 GAAP 資料的對帳包含在我們收益發布的附件中。

Before turning the call over to Jeff, I would like to make a few comments about forward-looking statements. We will be making forward-looking statements today that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results.

在將電話轉給傑夫之前，我想對前瞻性陳述發表一些評論。我們今天將根據1995 年《私人證券訴訟改革法案》的安全港條款作出前瞻性陳述。實際結果與預測結果有重大差異。

Among those factors which could cause actual results to differ materially are the following: adverse conditions, which can to lead a reduction in overall market demand, supply chain disruptions, labor trains, competition, weather, seasonality, currency-related issues, geopolitical events and other factors listed from time to time in the company's SEC reports. The company does not undertake any obligation to update the information contained herein, which speaks only as of this date.

可能導致實際結果出現重大差異的因素如下：可能導致整體市場需求減少的不利條件、供應鏈中斷、勞動力培訓、競爭、天氣、季節性、貨幣相關問題、地緣政治事件和公司的SEC 報告中不時列出的其他因素。該公司不承擔更新本文所含資訊的任何義務，這些資訊僅代表截至目前的情況。

I would now like to introduce Jeff Leonard. Jeff, please go ahead.

現在我想介紹傑夫·倫納德。傑夫，請繼續。

Thank you, Ed. We want to thank everyone who joined us on the conference call today and express our appreciation for your continued interest in Alamo Group. The third quarter is largely in line with our expectations as the strong performance from the Industrial Equipment division continued and as market headwinds prevailed in the vegetation management division.

謝謝你，艾德。我們要感謝今天參加我們電話會議的所有人，並對您對阿拉莫集團的持續關注表示感謝。第三季基本上符合我們的預期，因為工業設備部門持續強勁表現，而植被管理部門普遍面臨市場逆風。

I would now like to turn the call over to Agnes who will take us through a review of our financial results for the third quarter. I will then provide additional comments on the results and say a few words about the outlook for the fourth quarter and a few early thoughts on 2025. Following our formal remarks, we look forward to answering your questions. Agnes, please go ahead.

我現在想將電話轉給艾格妮絲，她將帶領我們審查第三季的財務表現。然後，我將對結果進行補充評論，並談談第四季度的前景以及對 2025 年的一些初步想法。艾格妮絲，請繼續。

Thank you, Jeff. Good morning, everyone. Third quarter results were largely in line with our expectations. The forestry cultural markets continued to struggle with difficult market conditions impacting our vegetation management division. The governmental, industrial and contractor sectors showed growth within the Industrial Equipment division.

謝謝你，傑夫。大家早安。第三季業績基本上符合我們的預期。林業文化市場繼續在艱難的市場條件下苦苦掙扎，影響了我們的植被管理部門。政府、工業和承包商部門在工業設備部門內呈現成長。

Total revenue for the quarter was $401.3 million, reflecting a 4.4% decline compared to same period last year. Gross profit for the quarter was $100.9 million with a margin of 25.1% of sales, down 206 basis points from the third quarter of 2023. This margin decline was primarily due to lower volume in vegetation management division.

該季度總營收為 4.013 億美元，較去年同期下降 4.4%。該季度毛利為 1.009 億美元，銷售利潤率為 25.1%，較 2023 年第三季下降 206 個基點。

SG&A expenses were $56.7 million, which is a reduction of $0.08 from the third quarter of 2023, excluding Royal Truck acquisition. These reductions are built up saving initiatives -- in vegetation management division. Operating income in the third quarter of 2024 was $40 million sustaining a double-digit operating margin of 10% of net sales. While this represents a decline of 190 basis points compared to the same period in 2023, it's important to note that our third quarter operating income in 2024 include approximately $1.6 million in separation expenses.

SG&A 費用為 5,670 萬美元，比 2023 年第三季減少 0.08 美元，不包括皇家卡車收購。這些削減是在植被管理部門建立的節約措施。 2024 年第三季的營業收入為 4,000 萬美元，營業利潤率維持兩位數，佔淨銷售額的 10%。雖然與 2023 年同期相比下降了 190 個基點，但值得注意的是，我們 2024 年第三季的營業收入包括約 160 萬美元的離職費用。

Net income for the third quarter of 2024 was $27.4 million or $2.28 per diluted share from net income of $34.9 million or $2.91 per diluted share in the same period last year.

2024 年第三季淨利為 2,740 萬美元，即稀釋後每股收益 2.28 美元，去年同期淨利為 3,490 萬美元，即稀釋後每股收益 2.91 美元。

Interest expense in the third quarter of 2024 was $1.8 million in the same period in 2023 due to reduced debt levels. The provision for income tax was slightly lower compared to the same period in 2023.

由於債務水準下降，2024 年第三季的利息支出為 2023 年同期的 180 萬美元。所得稅撥備較2023年同期略有下降。

With that overview, let's take a closer look at the performance of our divisions. Vegetation management division reported net sales of $190.1 million, a 23% reduction compared to the third quarter of 2023. The largest declines occurred in the forestry and agricultural segments while the governmental segment continued to show growth. Operating income for this division was $12.4 million, representing 6.5% of net sales. The reduction in net sales offset savings from cost reduction actions earlier this year. Additionally, this quarter -- we included approximately $1.6 million in separation expenses.

有了這個概述，讓我們仔細看看我們部門的表現。植被管理部門報告淨銷售額為 1.901 億美元，較 2023 年第三季減少 23%。該部門的營業收入為 1,240 萬美元，佔淨銷售額的 6.5%。淨銷售額的減少抵消了今年稍早成本削減措施帶來的節省。此外，本季我們計入了約 160 萬美元的離職費用。

On the other hand, Industrial Equipment division net sales were $211.2 million, representing 22% growth compared to the third quarter of 2023. Each group within this division achieved growth during the third quarter. Operating income was $27.7 million or 13.1% of net sales, marking an improvement of 180 basis points compared to the same period last year. The Industrial Equipment division benefited from increased revenue and efficiency initiatives implemented in 2023.

另一方面，工業設備部門的淨銷售額為 2.112 億美元，與 2023 年第三季相比成長 22%。營業收入為 2,770 萬美元，佔淨銷售額的 13.1%，較去年同期提高 180 個基點。工業設備部門受惠於 2023 年實施的收入增加和效率提升措施。

A few words to summarize year-end results -- year-to-date results. Through September 2024, net sales of $1.2 billion, reflecting 2.3% decrease compared to the first 9 months of 2023. The Vegetation Management division declined 18.2%, while the Industrial Equipment division grew 21.8%. Operating income for the first 9 months of 2024 was $130.4 million or [10.5%] of net sales, representing a decrease of $22.8 million and 55 basis points year-over-year. The operating income for Vegetation Management division was $50.1 million or [8%] of net sales, and it includes approximately $3.2 million in employee settlement expenses.

用幾句話來總結年終結果——年初至今的結果。截至 2024 年 9 月，淨銷售額為 12 億美元，與 2023 年前 9 個月相比下降 2.3%。 2024 年前 9 個月的營業收入為 1.304 億美元，佔淨銷售額的 [10.5%]，年減 2,280 萬美元，下降 55 個基點。植被管理部門的營業收入為 5,010 萬美元，佔淨銷售額的 [8%]，其中包括約 320 萬美元的員工安置費用。

Industrial Equipment division operating income of $80.3 million or 13% of net sales is a 300 basis point improvement versus prior year on higher revenue and improved efficiencies. Net income for the first nine months of the year was $87.8 million compared to $104.6 million for the first nine months of 2023. Interest expense improved by $2.4 million versus prior year, benefiting from lower debt levels. The provision for income taxes is $2.9 million lower versus prior year and we represent approximately 23.7% effective tax rate.

工業設備部門的營業收入為 8,030 萬美元，佔淨銷售額的 13%，由於收入增加和效率提高，比去年提高了 300 個基點。今年前 9 個月的淨利潤為 8,780 萬美元，而 2023 年前 9 個月的淨利潤為 1.046 億美元。所得稅撥備比前一年減少了 290 萬美元，有效稅率約為 23.7%。

Let me speak to the cost reduction actions that are now in progress. To address the challenging macroeconomic conditions in our vegetation management division, we continue to execute a number of cost reduction initiatives. We'll discuss the details later on the call. Our same target from these initiatives is between $25 million to $30 million on an annualized basis.

讓我談談目前正在進行的成本削減行動。為了因應植被管理部門面臨的宏觀經濟情勢的挑戰，我們持續實施一系列降低成本的措施。我們將在稍後的電話會議中討論詳細資訊。這些措施的目標是每年 2,500 萬至 3,000 萬美元。

We already began to see some of these savings in third quarter with further savings expected to accelerate over the next 12 months. The costs associated with these actions are mainly employee separation expenses. For the third quarter, we incurred approximately $1.6 million, and for the nine months, the total severance expense is approximately $3.2 million. At this time, we expect the final total to be between $4 million and $4.5 million, which will be incurred in 2024.

我們已經在第三季開始看到其中的一些節省，預計未來 12 個月將加速進一步節省。與這些行動相關的成本主要是員工離職費用。第三季度，我們產生了約 160 萬美元，這九個月的遣散費總額約為 320 萬美元。目前，我們預計最終總額將在 400 萬至 450 萬美元之間，將於 2024 年產生。

Moving on to the balance sheet. We continue to maintain a strong financial position, which provides us with the flexibility to support ongoing initiatives and navigate the current environment effectively. Our total assets were $1.481 billion at the end of the third quarter, representing a small increase of $25.8 million or 1.8% compared to last year at the same time. This increase is driven by higher cash and cash equivalents. We reduced our accounts receivables by $21 million to $356.6 million also representing a reduction in days sales outstanding of 5 days compared to the end of third quarter in 2023.

繼續看資產負債表。我們繼續保持強勁的財務狀況，這使我們能夠靈活地支持正在進行的計劃並有效應對當前的環境。截至第三季末，我們的總資產為14.81億美元，比去年同期小幅增加2,580萬美元，增幅1.8%。這一增長是由現金和現金等價物增加所推動的。我們的應收帳款減少了 2,100 萬美元，達到 3.566 億美元，這也意味著與 2023 年第三季末相比，應收帳款天數減少了 5 天。

Inventory of $372 million was flat compared to the end of third quarter last year. Reductions we achieved in vegetation management division offset an increase in Industrial Equipment division. Higher inventory in the Industrial Equipment division supports revenue growth of 20%, 22% in that division. Operating cash flow for the first nine months of 2024 was $130.6 million increasing by $53.6 million or 70% compared to the first 9 months of 2023. Free cash flow for the first 9 months of 2024 were $111.7 million compared to $50 million at the end of the first 9 months of 2023.

庫存為 3.72 億美元，與去年第三季末持平。我們在植被管理部門實現的削減抵消了工業設備部門的成長。工業設備部門較高的庫存支持該部門收入成長 20%、22%。 2024 年前9 個月的營運現金流為1.306 億美元，比2023 年前9 個月增加5,360 萬美元，即70%。 5,000 萬美元。

In third quarter of 2024, we paid down total debt by another $69.5 million. Total debt net of cash of $84.1 million improved by $122 million or 6% compared to the third quarter of 2023.

2024 年第三季度，我們又償還了 6,950 萬美元的總債務。扣除現金後的總債務為 8,410 萬美元，與 2023 年第三季相比減少了 1.22 億美元，即 6%。

To conclude, I'd like to emphasize our commitment to delivering long-term value to our shareholders. We had our Board has approved a regular dividend of $0.26 per share for the third quarter 2024, underscoring our confidence in the strength and stability in this business. As we move more, we will remain focused on driving growth and optimization of our operations.

最後，我想強調我們致力於為股東提供長期價值。我們的董事會已批准 2024 年第三季每股 0.26 美元的定期股息，突顯了我們對該業務的實力和穩定性的信心。隨著我們採取更多行動，我們將繼續專注於推動業務成長和優化。

Thank you. I'll turn it back over to Jeff.

謝謝。我會把它轉回給傑夫。

Thank you, Agnes. I would like to add my personal welcome to everyone who joined us on the call this morning. The company's third quarter results were in line with our expectations given the mix conditions in our markets. As we experienced in the second quarter, the capital, industrial, contractor and vegetation markets continued to display a very divergent activity levels during the current quarter. We were very pleased that our governmental customers continue to invest in modernizing and upgrading their maintenance fleets.

謝謝你，艾格妮絲。我謹向今天早上參加我們電話會議的所有人表示我個人的歡迎。考慮到我們市場的混合狀況，該公司第三季的業績符合我們的預期。正如我們在第二季度所經歷的那樣，資本、工業、承包商和植被市場在本季繼續表現出非常不同的活動水平。我們非常高興我們的政府客戶繼續投資於其維護車隊的現代化和升級。

In North America, governmental demand remained strong across all of our major product lines. We have been anticipating some [model offering] in the United States as we approach national elections, but the actual impact has been minimal. Municipal finances remain in good shape as a result of solid economic growth and a sustained flow of federal aid. A recent report from the National League of Cities also indicates that cities are generally prepared for an eventual tapering of federal aid. Municipal revenue remained stable on the strength of high property [tax receipts] despite a modest reduction in sales tax revenue.

在北美，政府對我們所有主要產品線的需求仍然強勁。隨著全國大選的臨近，我們一直預期美國會出現一些[模型產品]，但實際影響微乎其微。由於經濟的穩健成長和聯邦援助的持續流動，市政財政狀況保持良好。全國城市聯盟最近的一份報告也表明，城市普遍為最終削減聯邦援助做好了準備。儘管銷售稅收入略有減少，但由於房地產[稅收收入]較高，市政收入保持穩定。

Similarly, the National Association of State Budget Officers in a recent update, reported the fiscal year 2024 revenues in a majority of the states closed above the original forecast and in some cases, above upwardly revised forecast.

同樣，全國州預算官員協會在最近的更新中報告稱，大多數州 2024 財年的收入收盤高於最初的預測，在某些情況下高於上調的預測。

According to the same report, most states also reported a fourth consecutive year of surpluses, although smaller than in the immediately preceding years and that rainy day funds continue to strengthen. These reports align well with results in our Industrial Equipment division reported in the third quarter. Demand for the company's vacuum trucks, street sweepers, debris collectors, craft attenuators and snow removal equipment remained historically elevated during the quarter.

根據同一份報告，大多數州也連續第四年報告盈餘，儘管比前幾年要少，而且應急基金繼續加強。這些報告與我們工業設備部門第三季報告的結果非常吻合。本季對該公司真空卡車、街道清掃機、碎片收集器、製程衰減器和除雪設備的需求仍處於歷史高點。

Sales in the Industrial Equipment division were more than 22% higher than in the corresponding period of '23. Order bookings in this division increased modestly compared to the third quarter of 2023, but remained at historical levels and ended the quarter with a backlog in excess of $540 million, up nearly 9% compared to the third quarter of 2023. This division reported strong profitability with net income of $27.7 million, up nearly 42% compared to the same period of 2023.

工業設備部門的銷售額比 2023 年同期成長了 22% 以上。與2023 年第三季相比，該部門的訂單預訂量略有增長，但仍保持在歷史水平，本季末積壓訂單超過5.4 億美元，比2023 年第三季增長近9%。能力強勁淨利為2,770萬美元，較2023年同期成長近42%。

EBITDA was also very strong at 15.9%, an improvement of 160 basis points to the prior year third quarter. Industrial Equipment division order bookings increased by 3% relative to the third quarter of 2023. Unfortunately, conditions in several markets served by the vegetation management division remained steady during the third quarter.

EBITDA 也非常強勁，達到 15.9%，比去年第三季提高了 160 個基點。工業設備部門的訂單預訂量較 2023 年第三季增加了 3%。

Demand for lumber and wood derived products continued at a low level as the residential and commercial construction markets remain soft. US housing starts with our lowest level since the onset of the pandemic has elevated mortgage rates are on the sidelines. As a result, sales of the division's forestry and tree care products declined sharply in North America compared to the prior year third quarter, with the decline partially offset by improved sales in Europe.

由於住宅和商業建築市場依然疲軟，對木材和木材衍生產品的需求繼續保持在較低水平。美國房屋開工率創大流行爆發以來的最低水平，抵押貸款利率上升，但仍處於觀望狀態。因此，與去年第三季相比，該部門林業和樹木護理產品在北美的銷售額大幅下降，但歐洲銷售額的成長部分抵消了下降幅度。

Markets for the division's agricultural mowers, tillage and related products also remained softer during the third quarter. The US Department of Agriculture projects that in '24, farm income will decline nearly 7% relative to 2023 on an inflation-adjusted basis. Despite the expected decline, forecast farm income would be 15% above its 20-year average, but 28% off from the peak recorded in 2022, again, adjusted for inflation.

該部門的農用割草機、耕作機及相關產品的市場在第三季也依然疲軟。美國農業部預計，經通膨調整後，24 年農業收入將比 2023 年下降近 7%。儘管出現預期下降，但經通膨調整後，農業收入預計將比 20 年平均值高出 15%，但仍比 2022 年創下的峰值低 28%。

Commodity prices improved somewhat during the third quarter but remained well below the peak levels recorded in the first half of 2022. The combination of lower crop prices and rising input costs drove farmer sentiment to the lowest level since 2016. Farmers continue to delay purchases of new equipment and that has kept dealer inventories elevated.

大宗商品價格在第三季度有所改善，但仍遠低於2022 年上半年記錄的峰值水平。購買新農產品設備，這使得經銷商庫存保持在較高水準。

Sales of the vegetation management division's agricultural products declined in the third quarter relative to the corresponding period of 2023 in both North South America and Europe. Sales of specialty mowers to governmental agencies for maintenance of roadway aprons and other rights of way remained elevated. The state and municipal governments continue to invest steadily to upgrade roadway maintenance equipment fleets. Sales of our new Mantis prime mover have steadily increased during -- since second generation of this product was officially introduced earlier this year. Sales of these specialty vehicles increased nicely during the third quarter and were a bright spot for the vegetation management division in what was otherwise a challenging quarter.

與 2023 年同期相比，第三季植被管理部門的農產品銷售額在北美、南美和歐洲均有所下降。向政府機構出售用於維護停機坪和其他通行權的特殊割草機的銷量仍然很高。州和市政府持續穩定投資升級道路養護設備車隊。自今年稍早正式推出第二代產品以來，我們的新型 Mantis 原動機的銷售量穩定成長。這些特種車輛的銷售量在第三季大幅成長，在原本充滿挑戰的季度中成為植被管理部門的亮點。

In the face of these market headwinds, vegetation management division sales for the third quarter declined 23% versus the third quarter of 2023. Order bookings declined 29% from the same period of 2023, and the division ended the quarter with a backlog of $185 million.

面對這些市場逆風，植被管理部門第三季銷售額較 2023 年第三季下降 23%。

To address the difficult conditions in vegetation management, the company continued to streamline its operations during the quarter. During the second quarter, the company initiated the transfer of manufacturing of Rhino and Tree Care products to the company's largest forestry and tree care manufacturing facility in Wind, Michigan. The consolidation will be completed during the fourth quarter this year.

為了解決植被管理方面的困難，該公司在本季繼續精簡營運。第二季度，該公司開始將犀牛和樹木護理產品的製造轉移到該公司位於密西根州溫德的最大林業和樹木護理製造工廠。合併工作將於今年第四季完成。

During August, we announced the divestiture parts to FP or golf tillage tools. This was a small transaction that will allow our vegetation management team to focus on developing in its core market areas. Also in August, we announced a second major facility consolidation involving the transfer of [NOG] product manufacturing to our larger facility in Selma, Alabama where we currently produce push of branded mowers and related equipment. We expect to book additional expenses associated with these actions in the fourth quarter.

8月份，我們宣布將部分業務剝離給FP或高爾夫耕作工具。這是一筆小交易，將使我們的植被管理團隊能夠專注於其核心市場領域的發展。同樣在8 月，我們宣布了第二次重大設施整合，涉及將[NOG] 產品製造轉移到我們位於阿拉巴馬州塞爾瑪的更大工廠，我們目前在那裡生產品牌割草機和相關設備。我們預計在第四季度記入與這些行動相關的額外費用。

Following the anticipated completion of this consolidation in the first quarter of 2025, the Gibson City, Illinois facility will be closed. The facility consolidations currently in progress will reduce the company's global manufacturing capacity by approximately 8%, falling within the vegetation management division. The company is continuing to expand industrial equipment manufacturing capacity, particularly for vacuum trucks and snow rollable equipment.

預計在 2025 年第一季完成合併後，伊利諾州吉布森市的工廠將關閉。目前正在進行的設施整合將使該公司的全球製造能力減少約 8%，屬於植被管理部門。該公司正在繼續擴大工業設備製造能力，特別是真空卡車和雪滾設備的製造能力。

Associated with these significant facility consolidations, the company's employee population to decline approximately 10% by the end of 2024 compared to December 2023. While these actions are regrettable, they were necessary to address declining demand in vegetation management and to restore acceptable profitability given current market conditions.

與這些重大設施整合相關，到2024 年底，該公司的員工人數將比2023 年12 月減少約10%。接受的盈利能力是必要的狀況。

Turning to corporate performance. Third quarter consolidated operating income declined 9% compared to the third quarter of 2023 as a result of lower sales and operating margin in vegetation management partly offset by improved sales and operating margin in Industrial Equipment. We were pleased that despite the headwinds in vegetation management, the company achieved an operating margin of 10% for the third quarter net of restructuring costs, again, demonstrating strength -- serving diverse markets. Our teams did a great job managing the balance sheet during the third quarter as total debt net of cash declined by more than $90 million during the quarter and has declined by $126 million compared to the third quarter of 2023.

轉向企業績效。與 2023 年第三季相比，第三季合併營業收入下降了 9%，原因是植被管理業務的銷售額和營業利潤率下降，但被工業設備業務的銷售和營業利潤率提高所部分抵消。我們很高興地看到，儘管植被管理面臨阻力，該公司在第三季扣除重組成本後仍實現了 10% 的營業利潤率，再次展現了服務多元化市場的實力。我們的團隊在第三季的資產負債表管理方面做得非常出色，該季度扣除現金的總債務減少了超過 9,000 萬美元，與 2023 年第三季相比減少了 1.26 億美元。

Long-term debt at the end of the third quarter was down more than 30% compared to the same time last year. Third quarter EBITDA was $170 million or 13.7% of sales. We are, therefore, in an excellent position to benefit from what is expected improved M&A environment in 2025. Our outlook for remainder of 2024 is somewhat cautious. While we do not anticipate a swing in market dynamics in the final weeks of the year, the potential impact of national elections in the United States near-term uncertainty. We also expect to incur additional employee reduction costs in the fourth quarter related to the plant consolidation is now underway.

第三季末的長期債務比去年同期下降了30%以上。第三季 EBITDA 為 1.7 億美元，佔銷售額的 13.7%。因此，我們處於有利位置，可以從 2025 年預期改善的併購環境中受益。雖然我們預計今年最後幾週市場動態不會出現波動，但美國全國大選的潛在影響近期存在不確定性。我們也預計第四季將產生與目前正在進行的工廠整合相關的額外裁員成本。

The horrific devastation and the 2 major hurricane impacted the South Eastern of United States would require a great deal of specialized equipment to clear the overwhelming mounds of filters and other debris, and we anticipate a short-term movement in demand for chippers -- and will impact earnings positively. Market dynamics for 2025 were expected to remain mixed, pinning by governmental agencies is expected -- to that our market position management product have modestly improved next year despite what is expected to be another challenging year in the agricultural sector. Given the mixed outlook, we will continue to adapt our operating model and cost structure to defend earnings no matter how the markets may develop.

可怕的破壞和影響美國東南部的兩場大型颶風將需要大量的專業設備來清除大量的過濾器和其他碎片，我們預計對削片機的需求將出現短期變化，並且將對收益產生積極影響。預計 2025 年的市場動態將繼續喜憂參半，預計政府機構將在明年推動我們的市場地位管理產品略有改善，儘管預計農業領域將又是充滿挑戰的一年。鑑於前景好壞參半，無論市場如何發展，我們都將繼續調整我們的營運模式和成本結構，以捍衛獲利。

Given the strong backlog in the Industrial Equipment division and its positive outlook, we believe 2025 will be another positive year for the company. We were also pleased to announce a share repurchase program under which the company is authorized to repurchase up to $50 million of its outstanding common stock. The just announced repurchase plan affirms our confidence in the future of our business, and is based on the strength of our balance sheet and our expectations of future cash flow.

鑑於工業設備部門的大量積壓訂單及其積極的前景，我們相信 2025 年將是該公司另一個積極的一年。我們也很高興地宣布一項股票回購計劃，根據該計劃，該公司有權回購最多 5000 萬美元的已發行普通股。剛剛宣布的回購計畫肯定了我們對業務未來的信心，並且基於我們資產負債表的實力和對未來現金流的預期。

Before ending, I would like to take this opportunity to express sincere appreciation to our customers, dealers, supplier partners, our dedicated employees and financial stakeholders for their continued support of the company.

在結束之前，我想藉此機會向我們的客戶、經銷商、供應商合作夥伴、敬業的員工和財務利益相關者表示衷心的感謝，感謝他們對公司的持續支持。

This concludes our prepared remarks. We are now ready to take your questions. Operator, please go ahead.

我們準備好的演講到此結束。我們現在準備好回答您的問題。接線員，請繼續。

(Operator Instructions)

（操作員說明）

Mike Shlisky with D.A. Davidson.

麥克‧史利斯基 (Mike Shlisky) 與 D.A.戴維森。

So I guess I wanted to first ask about the cost reductions. I guess I want to make sure I understand how permanent these are. You did take out the capacity, you see a little bit less capacity going forward, thanks to the reduction as a result of the -- do you anticipate at some the need to kind of be that back? Or is that within the next couple of years, just not likely to take place?

所以我想我想先詢問成本削減的問題。我想我想確保我了解這些的持久性。你確實取消了產能，你看到未來的產能會減少一些，這要歸功於——你是否預期有些人需要恢復？或者這在未來幾年內不太可能發生？

Yes. So Mike, regarding the two consolidation, certainly, as you know, you're well aware of the facility we have in Michigan at over 1 million square feet has more than ample capacity to meet our future needs. And this consolidation was long anticipated of difficult to execute while forestry booming 1.5 years or so ago and has been for the last four or five years since we entered that sector.

是的。麥克，關於這兩次合併，當然，正如您所知，您很清楚我們在密西根州擁有超過 100 萬平方英尺的設施，有足夠的容量來滿足我們未來的需求。大約 1.5 年前，林業蓬勃發展，而自從我們進入這個行業以來，在過去的四、五年裡，這種整合一直是難以執行的。

The consolidation in the ag side of our business with Rhino Ag and Bush Hog, certainly, we'll have adequate capacity for the next couple of years. Being that, we'll reassess what we do in the future and may have to be either in one of our existing locations or another one. but that remains to be seen. It looks like the ag is going to stay soft in most of 2025 at least. So we have some time to reassess.

當然，我們在農業方面與 Rhino Ag 和 Bush Hog 的業務整合，我們將在未來幾年擁有足夠的產能。因此，我們將重新評估我們未來的工作，可能必須在我們現有的一個地點或另一個地點進行。但這還有待觀察。看起來至少在 2025 年的大部分時間裡，農業都會保持疲軟狀態。所以我們有一些時間重新評估。

But as you know, Mike, we have lots of manufacturing facilities, and we're able to move things around relatively easily within our network. So I'm not really overly concerned about that. I think regarding the cost savings programs underway, what I can say to you is that the majority of the actions we need to take to generate those savings are essentially done as we sit here today, while the physical consolidation of Rhino into Bush Hog remains, we need to move some machinery and some inventory and so on. All of the people actions and the capital investments we need to make in the Bush Hog facility are already underway.

但正如你所知，麥克，我們擁有許多製造設施，並且我們能夠在我們的網路內相對輕鬆地移動物品。所以我並不太擔心這一點。我認為關於正在進行的成本節約計劃，我可以對你們說的是，我們為實現這些節約而需要採取的大部分行動基本上已經在我們今天坐在這裡完成了，而Rhino 到Bush Hog 的實體整合仍然存在，我們需要移動一些機器和一些庫存等等。我們需要在 Bush Hog 工廠進行的所有人員行動和資本投資都已經在進行中。

Got it. I also wanted to touch on the margin outlook for 2025. Obviously, the cost reductions you made a bar 1 or 2 higher for next year. As far as what's in the backlog in both of the segments, do you feel like you've got opportunities to get up more into next year on the operating margin line?

知道了。我還想談談 2025 年的利潤前景。就這兩個部門的積壓情況而言，您是否認為明年有機會在營業利潤線上取得更多進展？

Yes. That's what we're expecting, Mike. Agnes and I have told the market we're going to drive margins higher, and that's what we're going to do to. The management team is very committed to that. And we're actually taking deeper actions than we otherwise would in this event, and we planned some further actions, so we have some contingencies in the event the markets invention management should continue to decline. Although my personal view is we're fairly close to the bottom. It's been noted that our bookings and backlog and so on have stabilized fairly well now. So we're going to have to just ride out where it is for most of 2025.

是的。這就是我們所期待的，麥克。艾格妮絲和我已經告訴市場，我們將提高利潤率，這就是我們要做的。管理團隊對此非常致力於。實際上，我們在這次事件中採取了比其他情況更深入的行動，並且我們計劃了一些進一步的行動，因此，如果市場發明管理繼續下降，我們會採取一些應急措施。儘管我個人的觀點是我們已經相當接近底部了。值得注意的是，我們的預訂和積壓等現在已經相當穩定。因此，我們將不得不在 2025 年的大部分時間裡安然度過。

But forestry, I'm more optimistic about. I think forestry shows a little bit of luck, not just because of the hurricanes, but generally speaking, there's been a modest uptick in activity that we've seen in that sector. We've talked to a number of the major customers and they're feeling a little bit more optimal 2025 with the expectation that interest rates will come down a little bit.

但林業，我更看好。我認為林業表現出了一點運氣，不僅是因為颶風，而且總的來說，我們在該領域看到的活動略有增加。我們與一些主要客戶進行了交談，他們感覺 2025 年情況會更理想，預計利率會略有下降。

So yes, Mike, I do believe we've got room to expand margins by a couple of points next year. We need to execute what we're doing. We need to execute it well. But given where we stand today with the consolidations, I'm very confident we'll achieve that.

所以，是的，麥克，我確實相信明年我們有空間將利潤率擴大幾個百分點。我們需要執行我們正在做的事情。我們需要很好地執行它。但考慮到我們今天的整合情況，我非常有信心我們能夠實現這一目標。

And between ag and forestry, I want to confirm right now, forestry is the larger focus of sales, is that correct?

在農業和林業之間，我現在想確認一下，林業是銷售的更大重點，對嗎？

It is, and it was also the larger decline in dollars in that division.

確實如此，而且該部門的美元跌幅也更大。

Chris Moore with CJS Securities.

CJS 證券的 Chris Moore。

Maybe we can just start with -- keep on the margin discussion, maybe just go a little deeper by segment, but vegetation operating margin was 6.5% versus 7.6% in Q2. If you adjust out that 1.6%, it was 7.4% this quarter. So in terms of the bottom on that, is Q3 likely the bottom or still some uncertainty looking at Q4 versus that?

也許我們可以從繼續討論利潤率開始，也許只是按細分市場更深入一些，但植被運營利潤率為 6.5%，而第二季度為 7.6%。如果調整掉 1.6%，本季為 7.4%。那麼，就底部而言，第三季度可能是底部，還是第四季度與第四季度相比仍然存在一些不確定性？

I think we're close to the bottom prior to restructuring costs. You said on the call, we have further restructuring costs coming in vegetation management in Q4. And keep in mind, Chris, all of these restructuring actions were taking our vegetation management. And so if you think about taking several hundred people out of our organization as a percentage of employment and vegetation management is very heavy, to say the least. So we've got to kind of adapt to a new operating situation there in vegetation management.

我認為在重組成本之前我們已經接近底部。您在電話會議上表示，我們在第四季的植被管理方面將面臨進一步的重組成本。請記住，克里斯，所有這些重組行動都在影響我們的植被管理。因此，如果您考慮將數百人從我們的組織中剔除，至少可以說，就業和植被管理的比例非常大。因此，我們必須適應植被管理方面的新運作。

So I don't know if it's the absolute bottom or not, but we've taken very -- distractions that's what I'm trying to say to you. And Agnes and I have a bit of contingency in our pocket as we always do in terms of what we're announcing and what we plan to execute to make sure we do see some improvement in the margin, certainly in 2025. But Q4 is still a bit in the year, to be frank, where the market is going to go from here. I said I believe forestry has stabilized, we're stabilizing, ag looks like it's flattening, but it's very uncertain at the moment where that's going to go next year. And I think even the big OEMs are saying more or less the same thing. The picture is not very clear.

所以我不知道這是否是絕對的底部，但我們已經採取了非常分散的注意力，這就是我想對你們說的。艾格妮絲和我的口袋裡有一些應急措施，就像我們在宣布的內容和計劃執行的內容方面一貫所做的那樣，以確保我們確實看到利潤率有所改善，當然是在2025 年。但第四季仍然是坦白說，今年的某個時候，市場將走向何方。我說我相信林業已經穩定，我們正在穩定，農業看起來正在趨於平緩，但目前非常不確定明年會走向何方。我認為即使是大型原始設備製造商也或多或少地說著同樣的話。圖片不是很清楚。

I can share with you that our inventory out in our dealer network that what's on our floor plan is down very sharply compared to where it was pre-pandemic in 2018 and 2019, and I'll emphasize Barry. So from that point of view, we're in a much better position. The difficulty we face in ag is the large OEMs, the tractor OEMs still have a lot of inventory to push out into that dealer network.

我可以與您分享的是，我們經銷商網路中的庫存與 2018 年和 2019 年大流行前相比，我們的平面圖上的庫存大幅下降，我要強調巴里。所以從這個角度來看，我們處於一個更好的位置。我們在農業方面面臨的困難是大型原始設備製造商，拖拉機原始設備製造商仍然有大量庫存可以推入經銷商網路。

So we're not likely to see benefit of that in the short run. But if you put those two statements together, what it means is that the elasticity in the market from our point of view has declined, which means that as the market potentially recovers, we should see a very fast uptick because our field inventory is very low right now. So I hope it helps you a little bit.

因此，短期內我們不太可能看到這樣做的好處。但如果你把這兩個陳述放在一起，那就意味著從我們的角度來看，市場的彈性已經下降，這意味著隨著市場的潛在復甦，我們應該會看到非常快速的上升，因為我們的現場庫存非常低現在。所以我希望它對你有一點幫助。

That does, very helpful. Switch over to industry before I go back to vegetation. So Industrial operating margin, 13.1% for the quarter. We're modeling just below 13% for the year. I guess maybe the put and takes of being able to approach 13% again in '25?

確實如此，非常有幫助。在我回到植被之前先轉向工業。因此，本季工業營業利益率為 13.1%。我們預測今年的成長率略低於 13%。我想也許在 25 年能夠再次接近 13%？

I think we will. Chris, I think we're going to stabilize there in industrial at a nice high level given the backlog where it is. And although our bookings looked a little soft in the quarter, the demand for the products is not soft at all. So it's mostly a timing issue. We still have large opportunities ahead of us that our confidence level is very high.

我想我們會的。克里斯，我認為考慮到積壓情況，我們的產業將穩定在一個很好的高水準。儘管本季我們的預訂看起來有點疲軟，但對產品的需求一點也不疲軟。所以這主要是一個時間問題。我們仍然有很大的機會，我們的信心非常高。

So I think industrial is going to have a very nice year next year, and we still have some efficiency improvement measures that we're carrying out inside the Industrial division, that are on the backs of some of the recent acquisitions we've made. So we've got some facility consolidations, although small in scale to do in industrial to sort of ensure that operating margin and hopefully expand a little bit more.

因此，我認為工業明年將會有一個非常好的一年，我們仍然在工業部門內部實施一些效率改進措施，這些措施是在我們最近進行的一些收購的支持下進行的。因此，我們進行了一些設施整合，儘管在工業領域規模較小，以確保營運利潤並希望能夠擴大一點。

Got it. Very helpful. So you just talked about inventory levels continue to improve on the vegetation side. Rates coming down a little bit, hopefully more. Still not expecting ag improvement until late '25. What about the rate overall. What would it take to grow a little bit in '25?

知道了。非常有幫助。所以您剛才談到植被方面的庫存水準繼續改善。價格會下降一點，希望能下降更多。直到 25 年底才預計農業會有所改善。整體利率怎麼樣。在25年需要什麼才能成長一點點？

Well, I think what it's going to take is some interest rate help. I think that we got a little bit of interest rate help earlier in the year. Forestry will be the first to tick back up. And as I said, it's already showing some signs of life. Our fourth quarter is off to a good start in forestry, very encouraged to see that. And of course, our cost structure in forestry is now much lower having essentially closed 1 of the 2 larger plants we have. The facility that we've exited for forestry is a 400,000 square foot facility, so it's a big one. So we should see nice savings coming out of that. So I think forestry will be much better next year in the back half. It's not going to be an overnight event. But certainly, I see the progress, and I'm optimistic about that.

嗯，我認為需要一些利率幫助。我認為今年早些時候我們得到了一些利率幫助。林業將首先復甦。正如我所說，它已經顯示出一些生命跡象。我們的第四季在林業方面取得了良好的開端，看到這一點非常令人鼓舞。當然，我們在林業方面的成本結構現在要低得多，我們基本上關閉了 2 家較大工廠中的 1 家。我們退出的林業設施佔地 40 萬平方英尺，所以是一個很大的設施。因此，我們應該會看到由此帶來的可觀的節省。所以我認為明年下半年林業會好很多。這不會是一朝一夕的事。但當然，我看到了進展，並且對此感到樂觀。

Ag is just a tough call right now because we don't know what the actual situation is inside the big tractor OEMs. They still have a lot of inventory. They expect to push out into the field, which means that our dealer balance sheets are going to remain under pressure all year. And that makes it hard for a short liner like us to hold our on the shelf in the dealership. So that's why I'm more cautious about that.

現在，Ag只是一個艱難的選擇，因為我們不知道大型拖拉機原始設備製造商內部的實際情況如何。他們還有大量庫存。他們預計將進軍該領域，這意味著我們經銷商的資產負債表全年都將面臨壓力。這使得像我們這樣的短線公司很難將我們的產品放在經銷店的貨架上。所以這就是為什麼我對此更加謹慎。

Mig Dobre with Baird.

米格·多布雷和貝爾德。

Back to vegetation management, the orders there, your incoming orders have stabilized around $157 million. Throughout the year, you've been bringing down production, right? So Q1 revenue was $223 million, down to $211 million. Q3 was $190 million. So I guess my question is this, given that at least in the way you kind of framed vegetation management into 2025, it sounds like if we're going to see a recovery in orders, it's probably going to be pretty muted and might be more back half loaded.

回到植被管理，那裡的訂單，您收到的訂單穩定在 1.57 億美元左右。這一年來你們一直在降低產量，對嗎？因此，第一季營收為 2.23 億美元，降至 2.11 億美元。第三季營收為 1.9 億美元。所以我想我的問題是這樣的，考慮到至少從你對 2025 年植被管理的框架來看，聽起來如果我們要看到訂單的複蘇，它可能會相當平靜，而且可能會更多回來半載。

I would imagine that it's fair to assume that your production, your sales in vegetation management are going to continue to converge towards orders, right, towards this, call it, $160 million per quarter worth of sales and orders. Is that the right way to think about the fourth quarter -- right to think about the front half?

我想，可以公平地假設，您在植被管理方面的生產和銷售將繼續向訂單靠攏，對，就是這樣，每季的銷售額和訂單價值為 1.6 億美元。這是思考第四季的正確方式嗎？

It is because the backlog, particularly in the ag side of education management is quite low right now. It's not near an all-time low yet, but it's getting close, which means that we will be living more hand to mouth with booking bill being the key thing, get orders and ship them for at least the first half of next year in ag. Forestry is a little bit different case. As I said, we've gotten off to a good start in Q4 with orders in forestry, and I don't want to say too much about that yet. I obviously can't -- but I'm encouraged with what I see. Some of that was related to the hurricanes, but there's also some underlying demand coming back.

這是因為目前的積壓工作，尤其是教育管理的積壓工作相當低。它還沒有接近歷史最低點，但已經接近了，這意味著我們將更加勉強糊口，預訂賬單是關鍵，至少在明年上半年獲得訂單並發貨。林業的情況略有不同。正如我所說，我們在第四季度的林業訂單方面取得了良好的開端，我還不想對此說太多。我顯然不能——但我對所看到的感到鼓舞。其中一些與颶風有關，但也有一些潛在的需求回升。

Rick Raven went out and met with a number of our large customers in 4 or 3 a few weeks back and got a pretty encouraging report about how they see the future. They're obviously concerned the national elections and where interest rates go, that's what's creating the uncertainty. And as I said on the call, Mig, the link between 4 or 3 and housing starts is stronger than we had initially thought. When you actually go back and many a long period, which we did, to understand that.

幾週前，Rick Raven 出去會見了我們的一些大客戶，並獲得了關於他們如何看待未來的非常令人鼓舞的報告。他們顯然擔心全國選舉和利率走向，這就是造成不確定性的原因。正如我在電話中所說，Mig，4 或 3 與住房開工之間的聯繫比我們最初想像的要緊密。當你真正回去很多很長一段時間（我們所做的）時，才能理解這一點。

So as interest rates fall and eventually housing starts should pick up. The demand is there for housing. That will certainly help the forestry side of the business. So my view is, if there is a recovery next year in ag, and that's an if, it will be really late, late in the year, from my point of view. I think the forestry recovery could start around midyear. If we get another interest rate cut or 2 in the first quarter and maybe early in the second. That's how I'm looking at it.

因此，隨著利率下降，最終房屋開工率應該會上升。對住房的需求是存在的。這肯定會對林業業務有所幫助。所以我的觀點是，如果明年農業出現復甦，這是一個如果，那麼從我的角度來看，那將是非常晚的，今年晚些時候。我認為林業復甦可能會在年中左右開始。如果我們在第一季或第二季初再降息一次或兩次。我就是這麼看的。

I see. Well, really kind of where I was trying to get at with my question. If we're going to see revenues converge towards this, call it, $160 million level sometime in the front half of 2025. That's still, call it, a $30 million erosion relative to where you were in Q3. You do have cost savings like you outlined coming through. I still struggle to see how margins are going to be flat or up relative to what you had in Q3. I would imagine that you should have further margin erosion sequentially simply because of the normal decremental margins that would flow through from that revenue loss?

我懂了。嗯，這確實是我想表達的問題。如果我們要看到收入在 2025 年上半年某個時候趨向於這個水平，可以稱之為 1.6 億美元的水平。正如您所概述的那樣，您確實可以節省成本。我仍然很難看到利潤率與第三季相比會持平還是上升。我想你應該會繼續遭受進一步的利潤侵蝕，只因為收入損失會帶來正常的利潤遞減？

Yes. And I think, Mig, that's why I was on the earlier question about Q4. You're right. You're exactly right. That's the worry for Q4. But I'm less worried about it as we head into Q1 and Q2 next year. Because as I said, the amount of inventory on our books in the field is the lowest it's been in years by a long way, not even close. So we're down 60% compared to where it was in 2018 and '19. So there's not a lot of buffer sitting out there anymore. So you're right. The revenue run rate is going to remain low for a while, but we have taken a huge chunk of cost out of this business.

是的。我想，米格，這就是我之前回答有關第四季度問題的原因。你說得對。你說得完全正確。這就是第四季的擔憂。但隨著明年第一季和第二季的到來，我不再那麼擔心了。因為正如我所說，我們在該領域的書籍庫存量是多年來的最低水平，甚至遠遠不夠。因此，與 2018 年和 19 年相比，我們下降了 60%。因此，不再有太多的緩衝區了。所以你是對的。收入運行率將在一段時間內保持較低水平，但我們已經從這項業務中削減了大量成本。

As I said, all these cost reductions are in vegetation management. And when you look at these employee reductions that we said we're about 10% of the corporation inside that is 30%. So we've taken huge chunks of cost out of there. And as I said, Agnes and I have some additional contingencies that we've already planned, and we're planning some further actions if we need to take. You're right. We're going to be playing defense in that business for at least the first quarter of next year, make -- there's no getting around it. I agree with your comment.

正如我所說，所有這些成本降低都在於植被管理。當你看看這些裁員情況時，我們說我們大約占公司內部的 10%，實際上是 30%。因此，我們已經從那裡削減了大量成本。正如我所說，艾格妮絲和我已經計劃了一些額外的意外情況，如果需要的話，我們正在計劃採取一些進一步的行動。你說得對。我們將至少在明年第一季在該業務中採取防禦措施，這是無法迴避的。我同意你的評論。

I just want to make sure that we level set expectations here because I think it's sort of easy to get maybe estimates in the wrong place relative to what the business is able to do. So maybe to just kind of finish my thoughts here, if we're leaning out the cost savings that you've outlined on the call today, how would you care to normal decremental margins that investors need to kind of keep in mind when they're modeling any volume contraction into 2025? Is it 25%? Is it 30%? Is it 35%? So again, this is excluding kind of the cost savings that you talked about.

我只是想確保我們在這裡設定了期望，因為我認為相對於企業的能力，很容易在錯誤的地方得到估計。因此，也許在這裡結束我的想法，如果我們要了解您今天在電話會議上概述的成本節約，您會如何關心投資者在投資時需要記住的正常遞減利潤？ ？是25%嗎？是30%嗎？是35%嗎？再說一遍，這不包括您談到的成本節省。

Okay. Difficult question, Mig. I think if you look at vegetation management, the decremental margin in the short term, it could be 2 to 3 points, something like that. That's sort of where agonists are modeling the downside risk. And Agnes, is there anything you want to add to that from your point of view?

好的。這是個難題，米格。我認為如果你看看植被管理，短期內的遞減幅度可能是 2 到 3 個點，類似的東西。這就是激動劑對下行風險進行建模的地方。艾格妮絲，從你的角度來看，你還有什麼要補充的嗎？

So the cost savings that you've implemented now, as you heard Jeff describe the consolidations in the plants, those are permanent costs. And what we're doing is to design an improvement in the margins going forward. But we do have to consider the fact that exactly as you described that the revenue might still be lower. We need to consider seasonality, for example, in Q4. So when you model margins, we're not out of the woods yet, let's put it that way. And what we're expecting is an improvement later in 2025 and beyond.

因此，正如您聽到傑夫所描述的工廠整合一樣，您現在實施的成本節約是永久性成本。我們正在做的是設計未來利潤率的改進方案。但我們確實必須考慮這樣一個事實，正如您所描述的那樣，收入可能仍然較低。我們需要考慮季節性，例如第四季。因此，當您對利潤率進行建模時，我們還沒有走出困境，這麼說吧。我們預計 2025 年稍後及以後會有所改善。

And maybe one last thing here. I didn't mention it specifically on the call. When you look at the consolidation of the Bush Hog and Rhino brands, we've consolidated the SG&A functions as well. We've consolidated sales teams and the engineering team. So the overall cost structure has come down very significantly and we've taken large chunks out of that as well. So it's not just about capacity and absorption. We've made a structural change in that business.

也許還有最後一件事。我在電話中沒有具體提到這一點。當您看到 Bush Hog 和 Rhino 品牌的整合時，我們也整合了 SG&A 職能。我們整合了銷售團隊和工程團隊。因此，整體成本結構已經顯著下降，我們也從中削減了很大一部分。所以這不僅僅是容量和吸收的問題。我們對該業務進行了結構性變革。

And let me add one more thing, maybe. We do have -- another business. So we do like diversity in our business and investor equipment division is still doing quite well. So while vegetation is undergoing this change and we're taking an opportunity to adjust structural costs permanently, industry equipment is still doing very well. So we need to remember that.

也許讓我再補充一件事。我們確實還有另一項業務。因此，我們確實喜歡我們業務的多樣性，並且投資者設備部門仍然表現良好。因此，儘管植被正在經歷這種變化，我們正在藉此機會永久調整結構成本，但工業設備仍然表現良好。所以我們需要記住這一點。

Since you brought up SG&A, I had a question about this as well. 6% decline in the core -- pretty significant. And I'm sort of wondering 2 things here. The first one is, is there sort of a variable compensation, bonus accrual reversal, something of the sort that helped us here in Q3. How should we think about Q4 SG&A on a year-over-year basis? And given the restructuring and whatever additional plans you might have, is it fair to expect SG&A will decline in 2025 as well?

既然你提到了SG&A，我也有一個問題。核心下降 6%——相當顯著。我在這裡想知道兩件事。第一個是，是否存在某種可變薪酬、獎金應計逆轉，這在第三季度對我們有幫助。我們該如何看待第四季的銷售、管理及行政費用（SG&A）？考慮到重組以及您可能有的任何其他計劃，預計 SG&A 也會在 2025 年下降是否公平？

Okay. So to the first part of your question, Mig, Yes,, there's obviously an elimination of accruals for compensation for myself and everybody else in this company as it should be. So yes, that's true. I don't know the amount of that on the top of my head, but I'm sure this can get it for you or we can give it to you after this call. But secondly, as you think about SG&A going forward, the cost savings in the ag side of our business didn't appear. That consolidation in Q4 event. It's behind us, but it's a Q4 event. So you'll see further savings in the SG&A that will be permanent because this consolidation is not going to unravel. This is the structure of our ag business going forward forever.

好的。所以，對於你問題的第一部分，米格，是的，顯然，我自己和公司其他人的應計報酬被取消了，這是應該的。所以是的，確實如此。我不知道我腦子裡有多少，但我確信這可以為您提供，或者我們可以在這次通話後給您。但其次，當你考慮未來的 SG&A 時，我們業務的農業方面的成本節約並沒有出現。第四季的盤整事件。它已經過去了，但這是第四季度的事件。因此，您將看到 SG&A 的進一步節省，這將是永久性的，因為這種整合不會瓦解。這是我們農業業務永遠發展的結構。

So those two things will largely offset. Now to the second part of your question, what do you think about SG&A next year? Well, obviously, management is not a profit at the table until this business starts making more money. So it's a bit of a wild card. I don't want to tell you management is not going to earn bonuses next year. I certainly hope we do, but it's got to be on the basis of improved profitability. At this point, we haven't even discussed that with our Board of Directors yet. We're still doing our budget for next year as we speak.

所以這兩件事將在很大程度上抵消。現在回答你問題的第二部分，你對明年的銷售、管理及管理費用有何看法？顯然，在這項業務開始賺更多錢之前，管理並不是桌上的利潤。所以這有點不確定。我不想告訴你管理層明年不會獲得獎金。我當然希望我們這樣做，但這必須建立在提高獲利能力的基礎上。目前，我們甚至還沒有與董事會討論過這個問題。就在我們說話的時候，我們仍在製定明年的預算。

No, understood. I was just wondering if there's like a structural component in the SG&A line item that you wanted to call out. But that part is understood.

不，明白了。我只是想知道 SG&A 行項目中是否有您想要呼叫的結構元件。但這部分是可以理解的。

I guess the final question on the industrial equipment. Demand here is very good. I guess what I'm wondering about when I'm looking at more, right, your revenues have continued to tick up sequentially. Margin, however, has not at 13.1%. It was down sequentially versus the first half and the incremental softened a bit in the quarter as well at 21%. So I'm wondering if there's a function of mix here or if some of the positive price costs that we've seen earlier in the year, is starting to moderate. Really, the essence of the question is, can we continue to underwrite significant margin expansion in 2025 relative to this kind of like 13% level that you're being in 2024?

我猜最後一個問題是關於工業設備的。這裡的需求非常好。我想當我看到更多的時候我想知道的是，對吧，你們的收入繼續連續上升。然而，利潤率並未達 13.1%。與上半年相比，季增下降，本季增量也略有放緩，為 21%。因此，我想知道這裡是否存在混合功能，或者我們今年早些時候看到的一些正價格成本是否開始放緩。事實上，問題的本質是，相對於 2024 年 13% 的水平，我們能否在 2025 年繼續保證利潤率大幅成長？

Yes. There is certainly room for more margin expansion than industrial, but we've taken bits in that direction. They will moderate for sure because it gets tougher as you go. We are still running some under absorption in industrial. We have some facilities that are running flat out for full capacity. We have others that are not. We've taken one of the forestry plants that we vacated and making some industrial products in there for snow removal to accelerate the deployment of the backlog into revenue, which should help us going forward. So I think the industrial margins will continue to expand modestly all through 2025. I don't see any reason why it shouldn't and the orders that are coming in are very high quality for us right now.

是的。當然，與工業相比，利潤率還有更大的擴張空間，但我們已經朝這個方向採取了一些措施。他們肯定會緩和，因為隨著你的前進，事情會變得更加艱難。我們仍在工業領域進行一些吸收。我們的一些設施已滿載運轉。我們還有其他人沒有。我們已經騰出一處林業工廠，在那裡生產一些用於除雪的工業產品，以加速將積壓的訂單轉化為收入，這應該有助於我們前進。因此，我認為到 2025 年，工業利潤率將繼續小幅增長。

As I said, our markets are stronger than what were reflected in the third quarter bookings. So we're fully very confident about that. The only thing I would say, I made a couple of references to national elections on the call. You know me well enough, and I think you followed us usually an election year is a tough year for us in industrial. The government will start to get really cautious.

正如我所說，我們的市場比第三季預訂所反映的要強勁。所以我們對此充滿信心。我唯一想說的是，我在電話會議上多次提到了全國選舉。您很了解我，我想您對我們的關注通常是選舉年對我們工業來說是艱難的一年。政府將開始變得非常謹慎。

Normally, that starts in the second quarter and then carries through into the third. So I think some of the flattening of orders we saw in the Industrial segment reflects that. And I'm pretty confident once the election is over, no matter which way it goes, the governmental will get back to doing what they do, which is spend money to upgrade their fleets. They have to. That's why I made all those remarks about what good shape the municipalities and the states are in the US, which matters a lot.

通常，這種情況從第二季開始，然後持續到第三季。因此，我認為我們在工業領域看到的一些訂單趨於平緩反映了這一點。我非常有信心，一旦選舉結束，無論結果如何，政府都會重新開始做他們所做的事情，那就是花錢升級他們的艦隊。他們必須這樣做。這就是為什麼我對美國各市和各州的良好狀況發表了所有評論，這非常重要。

We've also talked to our largest customers, our acting truck rental operators and our dealers, and they're all feeling good about the direction of things right now. So I think the future look for industrial is pretty bright.

我們也與我們最大的客戶、代理卡車租賃業者和經銷商進行了交談，他們都對目前的發展方向感覺良好。所以我認為工業的未來是非常光明的。

(Operator Instructions)

（操作員說明）

Greg Burns with Sidoti & Company.

格雷格·伯恩斯 (Greg Burns) 與 Sidoti & Company。

You leverage your debt levels and leverage continue to decline. Cash flow remains strong. And I appreciate implementation of the buyback. But I was just wondering what your plans for M&A are, if any, what the pipeline of maybe opportunities look like? Are you looking to expand into any new adjacent categories. What are the opportunities maybe for some inorganic growth to offset some of the weakness we're seeing now in vegetation management?

你利用你的債務水平，槓桿率繼續下降。現金流依然強勁。我很欣賞回購的實施。但我只是想知道你們的併購計畫是什麼（如果有的話），可能的機會管道是什麼樣的？您是否希望擴展到任何新的相鄰類別。一些無機生長可能有哪些機會來抵消我們現在在植被管理中看到的一些弱點？

Yes. The M&A pipeline for '25 is looking interesting with a couple of big opportunities coming that are pretty much right in our sweet spot. So I'm encouraged about that, and that's why Agnes and I are holding a bit of cash right now. And the share buyback -- is more opportunistic. We are generating a lot of cash right now, Greg, exactly to your point, we're back to our old habits there, and I mean to have it in a positive way of spending lots of cash. And as we've taken this much cost out of the business, we should continue to have very positive cash flow going forward.

是的。 25 年的併購管道看起來很有趣，即將到來的幾個大機會幾乎處於我們的最佳位置。所以我對此感到鼓舞，這就是為什麼艾格妮絲和我現在持有一些現金。而股票回購則更具機會主義色彩。格雷格，我們現在正在產生大量現金，完全符合你的觀點，我們回到了我們的舊習慣，我的意思是以積極的方式花費大量現金。由於我們已經從業務中削減了這麼多成本，因此我們未來應該會繼續擁有非常積極的現金流。

We still have opportunities to take inventory down further. We made nice progress with inventory in the Vegetation Management division. And unfortunately, we had to eat up some of that growth with industrial running so well. at the moment. But the pipeline looks good that there's a couple of small tuck-ins we're chasing that maybe aren't material to the top line but are very material in terms of our internal operations and then some big ones stacking up for next year. So that's why we're making sure the balance sheet is nice and taught. So we've got opportunity to move quickly when these opportunities come right next year.

我們仍有機會進一步降低庫存。我們在植被管理部門的庫存方面取得了良好進展。不幸的是，我們不得不在工業運作良好的情況下消耗部分成長。眼下。但管道看起來不錯，我們正在追逐一些小項目，這些項目可能對營收來說並不重要，但對我們的內部運作來說非常重要，然後是明年的一些大項目。這就是為什麼我們要確保資產負債表良好且經過訓練。因此，當明年這些機會到來時，我們有機會迅速採取行動。

This concludes the question and answer. I would like to turn the conference back over to management for any closing remarks.

問題和答案到此結束。我想將會議轉交管理層發表閉幕詞。

Thank you again for joining us today on the call. We look forward to speaking with all of you on our fourth quarter conference call in February 2025.

再次感謝您今天加入我們的電話會議。我們期待在 2025 年 2 月舉行的第四季電話會議上與大家交談。

The conference has now concluded. Thank you for attending presentation. You may now disconnect.

會議現已結束。感謝您參加演講。您現在可以斷開連線。